the new-generation chips, also called compound chips, are made of wide-band-gap materials such as silicon carbide (sic) and gallium nitride (gan). they are suitable for use in power devices and can operate in environments of high temperatures, frequency and voltage.
the value of the global market for sic power devices will climb to us$5.33 billion in 2026 from $1.61 billion in 2022, with a compound annual growth rate (cagr) of 35%, said trendforce, a market intelligence provider. that for gan power devices will grow 65% annually to $1.33 billion in 2026 from $180 million in 2022.
some analysts said that, as the sector is not within the coverage of the united states' sanctions, china can groom its own foundries and may be able to self-supply the third-generation chips one day.
“the development of the sic market is strongly driven by the new energy industry, particularly
the vigorous demand of new energy vehicles,” rany gong, an analyst at trendforce, said in a recent seminar in shenzhen.
gong said he expects that the sales of sic power devices for auto use will grow 38% annually on average to $3.98 billion in 2026 from $1.09 billion in 2022.
“the prospect of gan chips in the auto market is also growing but more efforts from industry players are needed,” he said.“the gan market is now mainly driven by consumer electronics as gan chips are suitable for the use in fast-charging devices.”
he said gan chips will be used in onboard chargers and dc-dc converters in around 2025 and in power inverters by 2030.
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“third-generation semiconductors can be widely used in new energy, transportation and optoelectronic sectors, helping china meet its emission peak and carbon neutrality targets,” cao jianlin, director of china advanced semiconductor industry innovation alliance (casa)'s steering committee, said in a seminar in beijing in late may.
cao said the global semiconductor market entered a downward cycle last year but the third-generation chip market continued to grow and entered a high-growth period due to the strong demand from the auto, solar energy and energy storage sectors. he said china will be able to self-supply the equipment it needs one day.
gan yong, an academician with the chinese academy of engineering and the director of the national advisory committee on new materials industry development strategy, said the rising use of third-generation chips will have a vital impact on the development of the global semiconductor industry in the next decade. he added that the globalization of the chip sector is unstoppable.
us sanctions
last october, the us commerce department's bureau of industry and security's (bis) imposed new curbs against china's chip sector. under the bis restrictions, mainland china-based fabs that produce chips of 16-nanometers or below will have to apply for licenses to purchase items from the us.
in january this year, japan and the netherlands agreed to join the us in limiting china's access to advanced semiconductor machinery. in april, japan said suppliers of 23 types of chip technology will need government approval to export to countries including china as early as july.
some analysts said the us curbs will not stop china from making third-generation chips as the production is a matter of materials science and does not require high-end lithography.
qianzhan industry research institute, a shenzhen-based organization, said in a research report that the trade war with the us actually made china become more focused on producing third-generation chips. it said china's sales of sic and gan power devices grew 300% to 7.11 billion yuan ($990 million) in 2021 from 1.79 billion yuan in 2017.
it said china's sales of sic and gan power devices will increase 45% annually on average to 66 billion yuan within the five years ended 2027 while sales of gan microwave radio-frequency devices will grow 22% annually to 24 billion yuan during the same period.
china science and technology information, a magazine published by the china association for science and technology, on may 30 published an article saying that the third-generation chip sector is an area where china can surpass the west in the future.
“in the developments of the first two generations of semiconductors, our country began later than other countries, and it is very difficult for us to 'overtake others on a bend' in auto racing,” it says.“but in the third-generation chip sector, chinese and foreign firms started almost at the same time. hopefully, our country can catch up and replace all foreign suppliers with local ones.”
dual-use chips
most of the world's chipmaking capacity is still making first-generation chips, which are mainly made of silicon. the second-generation chips, made of gallium arsenide (gaas) and gallium phosphide (gap), are used in 4g telecommunication equipment. some third-generation ones are made of zinc oxide (zno) and aluminum nitride (aln).
the cost of making a third-generation chip is about two to three times that of making a silicon one.
third-generation chips usually range between 90 and 350 nm, sizes that are not covered by the us sanctions. among them, gan microwave radio-frequency chips can be used in missiles, radars and electronic countermeasures designed to trick radars. sic chips can be used in jet, tank and naval ship engines, as well as wind tunnels.
casa president wu ling said last month that china should seek to self-supply its chips to meet the huge demand from the telecommunication, energy, transportation and defense industries.
she pointed out that the country still lacks long-term and stable investments in scientific research, a platform to evaluate the research results and a mechanism to encourage private capital to invest in the sector.
some analysts say it is not easy for china to catch up to the west in the third-generation chip sector in the short run as foreign firms, including wolfspeed, rohm, infineon, mitsubishi and stmicroelectronics, still own the core technologies .
at present, major chinese industry players include china resources microelectronics, sanan optoelectronics co, hangzhou silan and zhuzhou crrc times electric co ltd.
on june 7, the sweden-based
stmicroelectronics said it had signed an agreement with china's sanan optoelectronics to create a new 200mm sic device manufacturing joint venture in chongqing. it will contribute its technology to get a 49% stake in the jv.
read: tech giants 'de-risk' from china, but selectively
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